SGR Patch and ICD-10 Delay Pass Congress

On Monday, the US Senate followed the House’s earlier approval of a bill that stopped a 24-percent cut to Medicare physician payments from going into effect on April 1, and again “patched” the flawed sustainable growth rate (SGR) formula for another year. The bill also delays conversion to the ICD-10 diagnostic codes for at least another year.

Assuming the president signs the legislation, it will be the 17th such patch that Congress has enacted since the Medicare SGR formula became law in 1997.

Many lawmakers and the AMA were disappointed that a more permanent fix, which seemed possible a few months ago, was not enacted.

The Protecting Access to Medicare Act of 2014 passed on Monday will freeze Medicare physician payments through March 2015. Senate Majority Leader Harry Reid (D-Nev.) said the legislation was “not ideal,” but that he lacked the votes for a permanent solution. The measure was approved by the House last week.

President of the AMA, Ardis Dee Hoven, said in a statement her organization was “deeply disappointed” with the patch. “This bill perpetuates an environment of uncertainty for physicians, making it harder for them to implement new innovative systems to better coordinate care and improve quality of care for patients,” Hoven said.

Hopes had been high that Congress would pass a permanent solution this year. The momentum began building in February 2013, when the nonpartisan Congressional Budget Office unexpectedly cut the cost of a permanent fix by over $100 billion based on lower projections for Medicare spending. Last month, the House Energy and Commerce and Ways and Means committees and Senate Finance Committee released a bipartisan proposal for reforming the formula, a rare example of bipartisan, bicameral cooperation in Congress—they just couldn’t agree on how to pay for it. That continued to be a sticking point on Monday.

Just a month ago, the Centers for Medicaid and Medicare Services (CMS) stated that the implementation date for ICD-10 would stand. However, in its action on Monday, Congress delayed the implementation date from October 1, 2014 to not before October 1, 2015.

The bill passed Monday would also partially delay enforcement of a controversial inpatient payment rule for hospitals, the “two-midnight rule,” for six months.